Criteria
Loans are not permitted to be made from project cash without prior authorization from HUD.
Condition
During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on
behalf of an affiliate from project cash without HUD approval. The amount due to the Project as
of June 30, 2024 is $39,106.
Cause
Procedures were not in place to ensure that cash disbursements of project funds were limited to
project operating costs.
Effect or Potential Effect
Use of project funds for unauthorized loans may result in shortage of cash and default on
projects own obligations.
Questioned Costs
The payments of $39,106 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
The affiliated project should immediately reimburse the amount due to the Project and establish
procedures to ensure payments of this nature are not made in the future.
Auditor Noncompliance Code: G. Unauthorized loans from project funds
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for loans. Funds have been transferred and will maintain HUD policy of no
unauthorized loans between affiliates.
Finding Resolution Status: Resolved.
Criteria
Loans are not permitted to be made from project cash without prior authorization from HUD.
Condition
During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on
behalf of an affiliate from project cash without HUD approval. The amount due to the Project as
of June 30, 2024 is $39,106.
Cause
Procedures were not in place to ensure that cash disbursements of project funds were limited to
project operating costs.
Effect or Potential Effect
Use of project funds for unauthorized loans may result in shortage of cash and default on
projects own obligations.
Questioned Costs
The payments of $39,106 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
The affiliated project should immediately reimburse the amount due to the Project and establish
procedures to ensure payments of this nature are not made in the future.
Auditor Noncompliance Code: G. Unauthorized loans from project funds
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for loans. Funds have been transferred and will maintain HUD policy of no
unauthorized loans between affiliates.
Finding Resolution Status: Resolved.
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, HUD projects are required to establish and maintain at all times a fully
funded separate bank account for tenant security deposits collected.
Condition
As of June 30, 2024 management has not fully funded the tenant security deposits cash
account. The tenant security deposits cash account was underfunded by $2,677.
Cause
The tenant security deposits liability exceeds the tenant security deposits cash account by
$2,677 as of June 30, 2024.
Effect or Potential Effect
Management commingled tenant security deposits with its operating cash and did not have
sufficient cash balance in the tenant security deposits cash account to cover the tenant security
deposits liability as of June 30, 2024.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
Management should transfer $2,677 from the operating account in order to fully fund the tenant
security deposits account.
Auditor Noncompliance Code: M. Security Deposits
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for security deposits. Funds have been transferred and will maintain HUD policy.
Finding Resolution Status: Resolved.
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, HUD projects are required to establish and maintain at all times a fully
funded separate bank account for tenant security deposits collected.
Condition
As of June 30, 2024 management has not fully funded the tenant security deposits cash
account. The tenant security deposits cash account was underfunded by $2,677.
Cause
The tenant security deposits liability exceeds the tenant security deposits cash account by
$2,677 as of June 30, 2024.
Effect or Potential Effect
Management commingled tenant security deposits with its operating cash and did not have
sufficient cash balance in the tenant security deposits cash account to cover the tenant security
deposits liability as of June 30, 2024.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
Management should transfer $2,677 from the operating account in order to fully fund the tenant
security deposits account.
Auditor Noncompliance Code: M. Security Deposits
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for security deposits. Funds have been transferred and will maintain HUD policy.
Finding Resolution Status: Resolved.
Criteria
Residual receipts reserve deposits should be made within 90 days of year end and excess
residual receipts are required to be remitted to HUD upon receipt of HUD approval.
Condition
During the year ended June 30, 2024, management did not make the required residual receipts
reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD.
Additionally, once funded to the residual receipts reserve, since the deposit would have
exceeded the residual receipts maximum, management should have requested approval from
HUD to remit the excess residual receipts funds back to HUD.
Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due,
was paid from the operating account when it should have been paid from the residual receipts
account. Management should reimburse the operating account from the residual receipts
account.
Cause
Controls were not in place to ensure that residual receipts funds were timely deposited and
remitted, if applicable.
Effect or Potential Effect
The Organization is not in compliance with the requirements of the regulatory agreement and of
the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program.
Questioned Costs
$35,468
Identification as a Repeat Finding
This is a repeat finding.
Recommendation
Management should establish internal controls and procedures to ensure that excess residual
receipts reserve funds are remitted timely.
Auditor Noncompliance Code: B. Failure to make required residual receipts deposits.
Views of Responsible Officials
Management agrees with the finding and has done the following:
- Transferred $2,791 to the residual receipts account from the operating account.
- Transferred $35,468 to the residual receipts account from the operating account.
- We will ensure transfers are completed going forward and management will work with HUD
to get approval to release the funds from the residual receipts account and remit them to
HUD, as necessary.
Finding Resolution Status: In process.
Criteria
Residual receipts reserve deposits should be made within 90 days of year end and excess
residual receipts are required to be remitted to HUD upon receipt of HUD approval.
Condition
During the year ended June 30, 2024, management did not make the required residual receipts
reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD.
Additionally, once funded to the residual receipts reserve, since the deposit would have
exceeded the residual receipts maximum, management should have requested approval from
HUD to remit the excess residual receipts funds back to HUD.
Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due,
was paid from the operating account when it should have been paid from the residual receipts
account. Management should reimburse the operating account from the residual receipts
account.
Cause
Controls were not in place to ensure that residual receipts funds were timely deposited and
remitted, if applicable.
Effect or Potential Effect
The Organization is not in compliance with the requirements of the regulatory agreement and of
the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program.
Questioned Costs
$35,468
Identification as a Repeat Finding
This is a repeat finding.
Recommendation
Management should establish internal controls and procedures to ensure that excess residual
receipts reserve funds are remitted timely.
Auditor Noncompliance Code: B. Failure to make required residual receipts deposits.
Views of Responsible Officials
Management agrees with the finding and has done the following:
- Transferred $2,791 to the residual receipts account from the operating account.
- Transferred $35,468 to the residual receipts account from the operating account.
- We will ensure transfers are completed going forward and management will work with HUD
to get approval to release the funds from the residual receipts account and remit them to
HUD, as necessary.
Finding Resolution Status: In process.
Criteria
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and
recorded in order for the financial statements to be fairly presented in accordance with
generally accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit
requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30,
2023 financial statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted
in the United States of America. Condition 2 results in auditee being designated as not a lowrisk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed
timely.
Auditor Noncompliance Code: S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved.
Criteria
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and
recorded in order for the financial statements to be fairly presented in accordance with
generally accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit
requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30,
2023 financial statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted
in the United States of America. Condition 2 results in auditee being designated as not a lowrisk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed
timely.
Auditor Noncompliance Code: S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved.
Criteria
The property does not have a current Affirmative Fair Housing Marketing Plan.
Condition
In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, management must review and update the Affirmative Fair Housing
Marketing Plan at least every five years.
Cause
Procedures were not in place to ensure proper documentation was maintained upon the change
of management.
Effect or Potential Effect
Absent these written documents, the project could open itself up to mistakes in marketing and
leasing activity that could put their PRAC contract at risk upon renewal.
Questioned Costs
N/A
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
Management should maintain an Affirmative Fair Housing Marketing Plan and update it every
five years.
Auditor Noncompliance Code: Z. Other
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management has submitted their Affirmative Fair Housing Marketing Plan with an
effective date of September 26, 2024.
Finding Resolution Status: Resolved.
Criteria
The property does not have a current Affirmative Fair Housing Marketing Plan.
Condition
In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, management must review and update the Affirmative Fair Housing
Marketing Plan at least every five years.
Cause
Procedures were not in place to ensure proper documentation was maintained upon the change
of management.
Effect or Potential Effect
Absent these written documents, the project could open itself up to mistakes in marketing and
leasing activity that could put their PRAC contract at risk upon renewal.
Questioned Costs
N/A
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
Management should maintain an Affirmative Fair Housing Marketing Plan and update it every
five years.
Auditor Noncompliance Code: Z. Other
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management has submitted their Affirmative Fair Housing Marketing Plan with an
effective date of September 26, 2024.
Finding Resolution Status: Resolved.
Criteria
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Condition
During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of
the amount approved by HUD.
Cause
There were two different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$6,208
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
The management company should reimburse the project for overpaid management fee in the
amount of $6,208 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code: J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: In process.
Criteria
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Condition
During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of
the amount approved by HUD.
Cause
There were two different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$6,208
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
The management company should reimburse the project for overpaid management fee in the
amount of $6,208 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code: J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: In process.
Criteria
Loans are not permitted to be made from project cash without prior authorization from HUD.
Condition
During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on
behalf of an affiliate from project cash without HUD approval. The amount due to the Project as
of June 30, 2024 is $39,106.
Cause
Procedures were not in place to ensure that cash disbursements of project funds were limited to
project operating costs.
Effect or Potential Effect
Use of project funds for unauthorized loans may result in shortage of cash and default on
projects own obligations.
Questioned Costs
The payments of $39,106 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
The affiliated project should immediately reimburse the amount due to the Project and establish
procedures to ensure payments of this nature are not made in the future.
Auditor Noncompliance Code: G. Unauthorized loans from project funds
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for loans. Funds have been transferred and will maintain HUD policy of no
unauthorized loans between affiliates.
Finding Resolution Status: Resolved.
Criteria
Loans are not permitted to be made from project cash without prior authorization from HUD.
Condition
During the year ended June 30, 2024, the Project paid expenses in the amount of $39,106 on
behalf of an affiliate from project cash without HUD approval. The amount due to the Project as
of June 30, 2024 is $39,106.
Cause
Procedures were not in place to ensure that cash disbursements of project funds were limited to
project operating costs.
Effect or Potential Effect
Use of project funds for unauthorized loans may result in shortage of cash and default on
projects own obligations.
Questioned Costs
The payments of $39,106 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
The affiliated project should immediately reimburse the amount due to the Project and establish
procedures to ensure payments of this nature are not made in the future.
Auditor Noncompliance Code: G. Unauthorized loans from project funds
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for loans. Funds have been transferred and will maintain HUD policy of no
unauthorized loans between affiliates.
Finding Resolution Status: Resolved.
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, HUD projects are required to establish and maintain at all times a fully
funded separate bank account for tenant security deposits collected.
Condition
As of June 30, 2024 management has not fully funded the tenant security deposits cash
account. The tenant security deposits cash account was underfunded by $2,677.
Cause
The tenant security deposits liability exceeds the tenant security deposits cash account by
$2,677 as of June 30, 2024.
Effect or Potential Effect
Management commingled tenant security deposits with its operating cash and did not have
sufficient cash balance in the tenant security deposits cash account to cover the tenant security
deposits liability as of June 30, 2024.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
Management should transfer $2,677 from the operating account in order to fully fund the tenant
security deposits account.
Auditor Noncompliance Code: M. Security Deposits
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for security deposits. Funds have been transferred and will maintain HUD policy.
Finding Resolution Status: Resolved.
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, HUD projects are required to establish and maintain at all times a fully
funded separate bank account for tenant security deposits collected.
Condition
As of June 30, 2024 management has not fully funded the tenant security deposits cash
account. The tenant security deposits cash account was underfunded by $2,677.
Cause
The tenant security deposits liability exceeds the tenant security deposits cash account by
$2,677 as of June 30, 2024.
Effect or Potential Effect
Management commingled tenant security deposits with its operating cash and did not have
sufficient cash balance in the tenant security deposits cash account to cover the tenant security
deposits liability as of June 30, 2024.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendations
Management should transfer $2,677 from the operating account in order to fully fund the tenant
security deposits account.
Auditor Noncompliance Code: M. Security Deposits
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for security deposits. Funds have been transferred and will maintain HUD policy.
Finding Resolution Status: Resolved.
Criteria
Residual receipts reserve deposits should be made within 90 days of year end and excess
residual receipts are required to be remitted to HUD upon receipt of HUD approval.
Condition
During the year ended June 30, 2024, management did not make the required residual receipts
reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD.
Additionally, once funded to the residual receipts reserve, since the deposit would have
exceeded the residual receipts maximum, management should have requested approval from
HUD to remit the excess residual receipts funds back to HUD.
Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due,
was paid from the operating account when it should have been paid from the residual receipts
account. Management should reimburse the operating account from the residual receipts
account.
Cause
Controls were not in place to ensure that residual receipts funds were timely deposited and
remitted, if applicable.
Effect or Potential Effect
The Organization is not in compliance with the requirements of the regulatory agreement and of
the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program.
Questioned Costs
$35,468
Identification as a Repeat Finding
This is a repeat finding.
Recommendation
Management should establish internal controls and procedures to ensure that excess residual
receipts reserve funds are remitted timely.
Auditor Noncompliance Code: B. Failure to make required residual receipts deposits.
Views of Responsible Officials
Management agrees with the finding and has done the following:
- Transferred $2,791 to the residual receipts account from the operating account.
- Transferred $35,468 to the residual receipts account from the operating account.
- We will ensure transfers are completed going forward and management will work with HUD
to get approval to release the funds from the residual receipts account and remit them to
HUD, as necessary.
Finding Resolution Status: In process.
Criteria
Residual receipts reserve deposits should be made within 90 days of year end and excess
residual receipts are required to be remitted to HUD upon receipt of HUD approval.
Condition
During the year ended June 30, 2024, management did not make the required residual receipts
reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD.
Additionally, once funded to the residual receipts reserve, since the deposit would have
exceeded the residual receipts maximum, management should have requested approval from
HUD to remit the excess residual receipts funds back to HUD.
Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due,
was paid from the operating account when it should have been paid from the residual receipts
account. Management should reimburse the operating account from the residual receipts
account.
Cause
Controls were not in place to ensure that residual receipts funds were timely deposited and
remitted, if applicable.
Effect or Potential Effect
The Organization is not in compliance with the requirements of the regulatory agreement and of
the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program.
Questioned Costs
$35,468
Identification as a Repeat Finding
This is a repeat finding.
Recommendation
Management should establish internal controls and procedures to ensure that excess residual
receipts reserve funds are remitted timely.
Auditor Noncompliance Code: B. Failure to make required residual receipts deposits.
Views of Responsible Officials
Management agrees with the finding and has done the following:
- Transferred $2,791 to the residual receipts account from the operating account.
- Transferred $35,468 to the residual receipts account from the operating account.
- We will ensure transfers are completed going forward and management will work with HUD
to get approval to release the funds from the residual receipts account and remit them to
HUD, as necessary.
Finding Resolution Status: In process.
Criteria
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and
recorded in order for the financial statements to be fairly presented in accordance with
generally accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit
requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30,
2023 financial statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted
in the United States of America. Condition 2 results in auditee being designated as not a lowrisk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed
timely.
Auditor Noncompliance Code: S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved.
Criteria
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and
recorded in order for the financial statements to be fairly presented in accordance with
generally accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit
requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30,
2023 financial statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted
in the United States of America. Condition 2 results in auditee being designated as not a lowrisk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed
timely.
Auditor Noncompliance Code: S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved.
Criteria
The property does not have a current Affirmative Fair Housing Marketing Plan.
Condition
In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, management must review and update the Affirmative Fair Housing
Marketing Plan at least every five years.
Cause
Procedures were not in place to ensure proper documentation was maintained upon the change
of management.
Effect or Potential Effect
Absent these written documents, the project could open itself up to mistakes in marketing and
leasing activity that could put their PRAC contract at risk upon renewal.
Questioned Costs
N/A
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
Management should maintain an Affirmative Fair Housing Marketing Plan and update it every
five years.
Auditor Noncompliance Code: Z. Other
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management has submitted their Affirmative Fair Housing Marketing Plan with an
effective date of September 26, 2024.
Finding Resolution Status: Resolved.
Criteria
The property does not have a current Affirmative Fair Housing Marketing Plan.
Condition
In accordance with HUD Handbook 4530.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs, management must review and update the Affirmative Fair Housing
Marketing Plan at least every five years.
Cause
Procedures were not in place to ensure proper documentation was maintained upon the change
of management.
Effect or Potential Effect
Absent these written documents, the project could open itself up to mistakes in marketing and
leasing activity that could put their PRAC contract at risk upon renewal.
Questioned Costs
N/A
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
Management should maintain an Affirmative Fair Housing Marketing Plan and update it every
five years.
Auditor Noncompliance Code: Z. Other
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management has submitted their Affirmative Fair Housing Marketing Plan with an
effective date of September 26, 2024.
Finding Resolution Status: Resolved.
Criteria
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Condition
During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of
the amount approved by HUD.
Cause
There were two different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$6,208
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
The management company should reimburse the project for overpaid management fee in the
amount of $6,208 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code: J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: In process.
Criteria
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Condition
During the year ended June 30, 2024, the project paid management fees of $6,208 in excess of
the amount approved by HUD.
Cause
There were two different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
$6,208
Identification as a Repeat Finding
This is not a repeat finding.
Recommendation
The management company should reimburse the project for overpaid management fee in the
amount of $6,208 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code: J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: In process.